Correlation Between China Natural and Enlightify

Can any of the company-specific risk be diversified away by investing in both China Natural and Enlightify at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining China Natural and Enlightify into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between China Natural Resources and Enlightify, you can compare the effects of market volatilities on China Natural and Enlightify and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in China Natural with a short position of Enlightify. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Natural and Enlightify.

Diversification Opportunities for China Natural and Enlightify

-0.27

Correlation Coefficient

China Natural  Enlightify

Very good diversification

The 3 months correlation between China and Enlightify is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding China Natural Resources and Enlightify in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enlightify and China Natural is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on China Natural Resources are associated (or correlated) with Enlightify. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enlightify has no effect on the direction of China Natural i.e., China Natural and Enlightify go up and down completely randomly.

Pair Corralation between China Natural and Enlightify

Given the investment horizon of 90 days China Natural Resources is expected to under-perform the Enlightify. In addition to that, China Natural is 1.55 times more volatile than Enlightify. It trades about -0.03 of its total potential returns per unit of risk. Enlightify is currently generating about -0.02 per unit of volatility. If you would invest  102.00  in Enlightify on May 6, 2025 and sell it today you would lose (11.00) from holding Enlightify or give up 10.78% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

China Natural Resources  vs.  Enlightify

China Natural Resources

Risk-Adjusted Performance

Very Weak

Over the last 90 days China Natural Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Even with abnormal performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in September 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Enlightify

Risk-Adjusted Performance

Very Weak

Over the last 90 days Enlightify has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with China Natural and Enlightify

The main advantage of trading using opposite China Natural and Enlightify positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Natural position performs unexpectedly, Enlightify can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Enlightify will offset losses from the drop in Enlightify's long position.

The idea behind China Natural Resources and Enlightify pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Commodity Directory module to find actively traded commodities issued by global exchanges.